5. ACTIVITY, PERFORMANCE AND
EFFICIENCY (continued)
5.11 NHS Inflation
5.11.1 Could the Department give an explanation
as to the level of funding set aside for inflation in 2006-07?
In particular, can it give the average pay awards to each (subjective)
staff group and the inflation assumptions for non pay including
capital charges? (Q94)
ANSWER
1. NHS funding will rise by £6.6 billion
to £84.4 billion in 2006-07 from £77.8 billion in 2005-06,
equivalent to 5.8% real terms growth. This funding will help the
NHS to meet healthcare pressures reflected in Local Delivery Plans.
However, it is for health economies, including strategic health
authorities in partnership with NHS Trusts, Primary Care Trusts
and local authorities to determine how best to use their funds
to meet national and local priorities for improving health and
modernising services; to provide greater choice and better access
for patients. The significant additional resources available will
aid them in this process.
2. In 2006-07, payment by results (PbR)
covers elective, non-elective, outpatient and A&E activity
for NHS Trusts. The national price tariff underpinning the system
is adjusted annually for unavoidable cost pressures. The uplift
is based on the same assumptions that underpin the revenue allocations
to PCTs. The uplift includes:
— the expected impact on pay,
including Agenda for Change and the consultant contract;
— increases in the cost of drugs
and other technology, including increases arising from NICE appraisal
and guidelines;
— price inflation for goods and
services; and,
— an overall 2.5% efficiency gain
assumption.
3. For 2006-07, the total uplift for the
national tariff is 4%. The components of this are shown in Table
94a.
Table 94a
NHS TARIFF UPLIFT 2006-07
|
| 2006-07 (over 2005-06 baseline)
|
| £ millions
| % |
|
| Baseline | 49,806
| |
| Increase in pay and prices |
| |
| Pay | 1,028
| 2.06 |
| Non-pay inflation (prices) | 253
| 0.51 |
| Clinical Negligence Costs | 141
| 0.28 |
| Secondary care drugs | 287
| 0.58 |
| Revenue cost of capital | 218
| 0.44 |
| Gross pay and price increase | 1,927
| 3.87 |
| Efficiency at 2.5% in 2006-07 | -1,245
| -2.50 |
| Net pay and price increase | 682
| 1.37 |
| Reform and quality |
| |
| Consultant Contract | 50
| 0.10 |
| NCCG reform | 50
| 0.10 |
| Agenda for Change | 635
| 1.27 |
| NICE appraisals and guidelines | 291
| 0.58 |
| Investment in new capital | 101
| 0.20 |
| Total reform and quality | 1,127
| 2.26 |
| Information Technology |
| |
| NHS Connecting for Health | 163
| 0.33 |
| Total information technology | 163
| 0.33 |
| Technical adjustments |
| |
| Revaluation of NHS estate | 0
| 0.0 |
| Total technical adjustments | 0
| 0.0 |
| Pay | Overall
| 4.0 |
|
4. Table 94b shows the settlements awarded to
those staff whose pay arrangements are determined by the Review
Bodies.
Prices
5. The GDP deflator is used as a proxy for underlying
non-pay inflation in the NHS. This needs to be adjusted for assumptions
about the level of procurement and other efficiency savings that
the NHS is expected to make.
Capital Charges
6. At national level, the cost of capital charges paid
by the NHS is a circular flow of funds. The total of the capital
charges estimates made by NHS Trusts forms part of the total cash
resources available through PCT allocations.
7. Indices for land, buildings and equipment are produced
for the Department each year by the Valuation Office, in order
that the NHS may calculate capital charges in advance of the financial
year.
8. The aggregate index used to uplift capital charges
from 2003-04 to 2004-05 levels was 7.6%.
Table 94b
REVIEW BODY PAY SETTLEMENTS 2006
|
| Group | Settlement %
|
|
| Nursing and Midwifery | 2.50
|
| Allied Health Professionals | 2.50
|
| Consultants Old Contract(1) | 1.00
|
| Consultants New Contract(1) | 1.00
|
| Juniors | 2.20
|
| NCCGs | 2.40
|
| FHS Doctors (GPs) | 2.20
|
|
Source:
DDRB amd NOHPRB 2005
Footnotes:
1. Pay settlement staged, 1% from April 2006 increasing to
2.2% from November 2006.
5.11.2 Can the Department show trends in components
of HCHS and FHS inflation indices in each year since 1997-98 in
as much detail as possible? (Q95)
ANSWER
HCHS pay and prices inflation.
1. Trends in the Hospital and Community Health Service
(HCHS) inflation index is shown in Table 95a. The index
is calculated by combining the indices for pay inflation and price
inflation.
Pay
2. Pay inflation is calculated as a weighted average
of increase in unit staff cost for each of the staff groups within
the HCHS sector.
Prices
3. HCHS price inflation (ie the non-pay component) is
measured by the Health Service Cost Index (HSCI). The HSCI weights
together price increases for a broad range of items used by the
health service—for example, drugs, medical equipment, fuel,
telephone charges—using weights derived from expenditure
on these various goods and services reported in financial returns.
Table 95a
TRENDS IN COMPONENTS OF THE HCHS INFLATION INDEX
|
| | 1997-98
| 1998-99 | 1999-2000
| 2000-01 | 2001-02
| 2002-03 | 2003-04
| 2004-05 |
| % |
% | %
| % | %
| % | %
| % |
|
| Total Staff Pay | 2.5
| 4.9 | 6.9
| 7.2 | 8.3
| 5.0 | 7.3
| 4.5 |
| Review Body Staff | 2.2
| 5.1 | 7.6
| 7.5 | 9.4
| 5.1 | 8.3
| 3.7 |
| Non-Review Body Staff | 3.5
| 3.9 | 4.5
| 5.8 | 6.0
| 4.8 | 4.1
| 7.4 |
| Prices | 0.4
| 2.5 | 1.2
| -0.3 | 0.1
| 1.0 | 1.5
| 1.0 |
| HCHS Total | 1.7
| 4.0 | 4.5
| 4.2 | 5.1
| 3.5 | 5.2
| 3.4 |
|
Footnotes:
1. Prices and total HCHS inflation for 2002-03 and 2003-04
have been updated following a validation exercise.
2. Pay inflation for 2004-05 includes Foundation Trusts.
FHS Inflation
4. The components of the Family Health Service (FHS)
inflation index are set out in Table 95b. For General Medical
and Personal Medical Services (GMS/PMS) and General Dental and
Personal Dental Services (GDS/PDS), service specific inflation
is calculated as the increase year on year in the average cost
per practitioner. For both services, the changes in unit costs
include volume and quality effects (eg increase in practice staff
numbers or the provision of a changing range of services) as well
as pure price effects. For the Pharmaceutical Service (PhS) and
General Ophthalmic Service (GOS), service inflation is assumed
equal to movements in the GDP deflator.
5. We are currently reviewing both indices and considering
alternative data sources.
Table 95b
TRENDS IN COMPONENTS OF THE FHS INFLATION INDEX
|
| 1997-98
| 1998-99 | 1999-2000
| 2000-01 | 2001-02
| 2002-03 | 2003-04
| 2004-05 |
| % |
% | %
| % | %
| % | %
| % |
|
| GMS/PMS | 5.1
| 2.3 | 10.4
| 3.7 | 1.0
| 5.2 | 9.7
| n/a |
| GDS/PDS | 0.3
| 4.6 | 1.0
| 4.0 | 2.8
| 4.0 | 1.8
| 2.5 |
| PhS | 2.8 |
2.9 | 2.3
| 1.9 | 2.5
| 3.2 | 2.6
| 2.7 |
| GOS | 2.8 |
2.9 | 2.3
| 1.9 | 2.5
| 3.2 | 2.6
| 2.7 |
| FHS Total | 3.0
| 3.0 | 4.1
| 2.7 | 2.1
| 3.9 | 4.6
| n/a |
|
Footnotes:
1. Due to increasing significance of Personal Medical and
Personal Dental Services, from 2001-02 onwards,the medical and
dental indices have been calculated based on combined GMS and
PMS expenditure, and GDS and PDS expenditure. Prior to this only
GMS and GDS figures have been used.
2. The new GP contract was introduced from 1 April 2004, the
new contract data is practice base and therefore not comparable
with GMS/PMS data used for this index. As a consequence, no data
is available for GMS/PMS for 2004-05.
3. The comparatively high GMS/PMS inflation figure for 2002-03
and 2003-04 is due to a significant increase in expenditure on
PMS.
4. GDP deflator as at June 2006 have been used for PhS and
GOS in 2004-05.
5.11.3 What have trends in (a) the NHS inflation index
(b) sub-indices of the NHS inflation index and (c) relative weights
given to each sub-index been in each year since 1993-94? What
assumptions underlie the construction of the index and any changes
in weighting? (Q96)
ANSWER
1. The trends in the NHS inflation index and sub-indices
are shown in Table 96a.
2. The NHS inflation index is constructed using five
sub-indices. These are:
— HCHS pay index: This measures the change
in average paybill per head of those employed within the HCHS;
— HCHS price inflation: This measures the change
in the price of goods and services supplied to the HCHS, it is
measured by the Health Service Cost Index;
— HCHS Capital Inflation Index: This reflects
the changes in prices experienced in HCHS capital projects and
is calculated using a mixture of the construction price index
and the GDP deflator;
— FHS Index: This is produced using different
assumptions for each of the main groups. Details and changes are
explained in question 94. From 2004-05 the FHS index is no longer
available due to the introduction of the new GMS contract leading
to a discontinuity in the GMS/PMS data series; and,
— The "other" Index: This comprises
of the revenue and capital expenditure on Central Health Miscellaneous
Services (CHMS) and Departmental Administration (including the
Medicines Control Agency and NHS Estates). The GDP deflator is
used in the absence of service specific deflators.
3. The discontinuity of the FHS index also affects the
construction of the NHS index. We are currently reviewing the
methodology and exploring other data sources.
4. The weights attached to each of the elements for each
of the years are shown in Table 96b.
5. The weights attached to each of the elements are similar
in magnitude to last year; however, they have changed considerably
since 2001-02. This is due to an increase in the number of PCTs
from 164 to 304. PCTs have progressively taken over the commissioning
of healthcare from health authorities but also the provision of
some services from NHS trusts. The revenue expenditure for the
provider function cannot be accurately eliminated from the total
revenue expenditure hence year on year increases in total revenue
expenditure are not comparable.
6. Change in weights (specifically FHS and HCHS) from
2002-03 is due to a shift in responsibility of healthcare to PCTs.
Table 96a
NHS INFLATION INDEX—TRENDS
|
| Year | HCHS pay
| HCHS prices | HCHS capital
| FHS | Other
| NHS total |
|
| 1992-93 | 100.0
| 100.0 | 100.0
| 100.0 | 100.0
| 100.0 |
| 1993-94 | 104.2
| 101.4 | 103.4
| 100.6 | 102.5
| 102.7 |
| 1994-95 | 107.7
| 102.3 | 112.9
| 102.9 | 103.8
| 105.4 |
| 1995-96 | 112.5
| 105.6 | 118.0
| 105.5 | 106.8
| 109.3 |
| 1996-97 | 116.2
| 107.2 | 119.7
| 109.0 | 110.2
| 112.4 |
| 1997-98 | 119.1
| 107.6 | 124.7
| 112.2 | 113.6
| 114.8 |
| 1998-99 | 124.9
| 110.3 | 128.5
| 115.6 | 116.7
| 119.3 |
| 1999-2000 | 133.5
| 111.6 | 132.1
| 120.3 | 119.5
| 124.8 |
| 2000-01 | 143.1
| 111.2 | 139.7
| 123.6 | 122.2
| 130.1 |
| 2001-02 | 155.0
| 111.3 | 148.8
| 126.2 | 125.3
| 136.2 |
| 2002-03 | 162.8
| 112.5 | 155.4
| 131.1 | 129.5
| 141.1 |
| 2003-04 | 174.7
| 114.1 | 149.5
| 137.2 | 133.2
| 147.9 |
| 2004-05 | 182.6
| 115.3 | 154.6
| n/a | 136.9
| n/a |
|
Table 96b
NHS INFLATION INDEX—WEIGHTS
|
| | |
| | | Percentage
|
| Year | HCHS pay
| HCHS prices | HCHS capital
| FHS | Other
| NHS total |
|
| 1992-93 | 49.0
| 21.0 | 6.0
| 21.0 | 3.0
| 100.0 |
| 1993-94 | 49.0
| 21.0 | 5.0
| 22.0 | 3.0
| 100.0 |
| 1994-95 | 49.0
| 21.0 | 6.0
| 22.0 | 3.0
| 100.0 |
| 1995-96 | 49.0
| 21.0 | 5.0
| 22.0 | 3.0
| 100.0 |
| 1996-97 | 50.0
| 21.0 | 4.0
| 23.0 | 2.0
| 100.0 |
| 1997-98 | 47.0
| 25.0 | 3.0
| 23.0 | 2.0
| 100.0 |
| 1998-99 | 47.0
| 25.0 | 3.0
| 22.0 | 2.0
| 100.0 |
| 1999-2000 | 46.0
| 24.0 | 3.0
| 24.0 | 2.0
| 100.0 |
| 2000-01 | 46.0
| 22.0 | 4.0
| 26.0 | 2.0
| 100.0 |
| 2001-02 | 47.0
| 21.0 | 4.0
| 26.0 | 2.0
| 100.0 |
| 2002-03 | 48.0
| 32.0 | 4.0
| 14.0 | 2.0
| 100.0 |
| 2003-04 | 45.0
| 30.0 | 4.0
| 18.0 | 2.0
| 100.0 |
| 2004-05 | 47.0
| 32.0 | 4.0
| 14.0 | 2.0
| 100.0 |
|
5.12 Efficiency
5.12.1 What progress has been made towards a replacement
for the Cost Weighted Activity Index? What assessment has been
made of recent trends in NHS productivity? (Q97)
ANSWER
1. To measure progress against the 2002 spending review
value for money PSA target, the Department developed an interim
cost efficiency measure. The measure is calculated by comparing
increases in NHS expenditure adjusted for both input cost inflation
and increases in expenditure on improving the quality of NHS services,
with increases in NHS outputs as calculated by the new NHS output
index. This latter index, replaced the Cost Weighted Activity
Index (CWAI) and is calculated using data primarily published
in the "National Schedule of Reference Costs" and using
over 1,900 individual activity categories. The new NHS Outputs
index represents an improvement over the old CWAI, as:
— CWAI only included 12 activity types and
placed 60% of the expenditure weight on in-patients and a further
20% of the weight on outpatients which means;
— CWAI gave no credit for more complex case-mix;
and
— By shifting activity to more cost effective
settings, such as from in-patients to outpatients, CWAI reduced
recorded output (whilst still an issue with the new NHS Outputs
index, its effect is minimised).
In addition;
— CWAI had a secondary care focus and failed
to include new types of NHS activity; and
— quality of care was not considered.
2. One of the principal recommendations of the "Atkinson
Review of the Measurement of Government Output and Productivity
for the National Accounts" was that quality of care should
be included in NHS output and productivity measures. In response
to the Atkinson Review, on 7 December 2005, the Department published
"Healthcare Output and Productivity: Accounting for Quality
Change" a technical paper which explains progress in developing
more accurate methods of measuring healthcare output and productivity,
including quality change. The paper builds on the key recommendations
of the Atkinson Review, research by the University of York, National
Institute of Economic and Social Research (NIESR), and by the
Department.
3. On 27 February 2006, ONS published their second article
on health productivity "Public Service Productivity: Health".
ONS estimate that including adjustments for quality, (originally
outlined in "Accounting for Quality Change") such as
lower hospital mortality, estimated benefits from hospital treatment,
shorter waiting times, improved blood pressure control, lives
saved from statins, in addition to the increasing value of health,
NHS productivity has risen on average by up to 1.6% a year between
1999 and 2004.
5.12.2 What are the expected redundancy costs of the
current re-organisation of Strategic Health Authorities and Primary
Care Trusts? (Q98)
ANSWER
1. There will be a number of redundancies in SHAs and
PCTs following the restructuring brought about by Commissioning
a Patient-Led NHS.
2. Redundancy costs are very heavily influenced by the
number and age profile of the staff leaving. The detail is not
yet finalised, but assuming an average profile costs estimates
would be somewhere around £325 million under existing NHS
redundancy rules.
5.13 Managing the Department of Health
5.13.1 What was the total expenditure, grant-in-aid
funding and whole time equivalent staffing of each of the Department
of Health's Arm's Length Bodies in 2005-06? (Q99)
ANSWER
The information requested is given in Table 99.
Table 99
GRANT IN AID, EXPENDITURE AND STAFFING OF ARM'S LENGTH
BODIES IN 2005-06
|
Department of Health
Arm's Length Body
| Grant in Aid
(see note 7)
| Gross Operating
Costs (see note 8)
| Headcount
WTE
| Information Source
|
|
| £ thousands
| £ thousands |
| |
| Healthcare Commission (HC) | 68,851
| 76,879
| 780
| Fig from 2005-06
Annual Accounts
|
| Mental Health Act Commission (MHAC) | 5,310
| 5,665
| 42
| Fig from 2005-06
Annual Accounts
|
| Commission for Social Care Inspection (CSCI)
| 82,864 | 141,153
| 2,479 | Fig from 2005-06
Annual Accounts
|
| Independent Regulator of NHS Foundation Trusts (Monitor)
| 16,200 | 15,869
| 49
| Fig from 2005-06
Annual Accounts
|
| Commission for Patient and Public Involvement in Health (CPPIH)
| 31,515 | 30,458
| 173
| Fig from 2005-06
Annual Accounts
|
| Human Fertilisation and Embryology Authority (HFEA)
| 5,489
| 10,933
| 190
| Fig from 2005-06
Annual Accounts
|
| Human tissue Authority (HTA) | 1,224
| 1,201
| 18
| Fig from 2005-06
Annual Accounts
|
| Council for Healthcare Regulatory Excellence (CHRE)
| 2,232
| 2,399
| 116
| Fig from 2005-06
Annual Accounts
|
| General Social Care Council (GSCC) | 10,675
| 13,293
| 237
| Fig from 2005-06
Annual Accounts
|
| Postgraduate Medical Education and Training Board (PMETB)
| 3,229
| 5,145
| 15
| Provisional figures given
by DoF John Tuck
|
| Dental Vocational Training Authority (DVTA)
| 272
| 222
| 3
| Fig from 2005-06
Annual Accounts
|
| Medicines and Healthcare products Regulatory Agency (MHRA)
| 63,000 | 70,000
| 819
| Provisional figures given
by MHRA Brian Pocknall
|
| National Institute for Clinical Excellence (NICE)
| 27,031 | 26,178
| 185
| Fig from 2005-06
Annual Accounts
|
| National Patient Safety Agency (NPSA) | 32,935
| 33,264
| 304
| Fig from 2005-06
Annual Accounts
|
| Health Protection Agency (HPA) | 142,655
| 227,296 |
3,012 | Fig from 2005-06
Annual Accounts
|
| National Biological Standards Board (NBSB) |
10,807 | 17,425
| 302
| Fig from 2005-06
Annual Accounts
|
| National Treatment Agency (NTA) | 12,187
| 12,219
| 137
| Fig from 2005-06
Annual Accounts
|
National Blood & Transplant
(NHS BT)
| 37,728 | 402,830
| 5,986 | Fig from 2005-06
Annual Accounts
|
| NHS Litigation Authority (NHS LA) | 0
| 13,022
| 167
| Fig from 2005-06
Annual Accounts
|
| Health and Social Care Information Centre (HSC IC)
| 43,843 | 44,316
| 358
| Fig from the Draft
2005-06 Annual Accounts
|
| NHS Connecting for Health (NHS CfH) (12) |
0
| 538,321 |
1,412 | Fig from Connecting
for Health data
|
| NHS Institute for Innovation and Improvement (NIII)
| 37,970 | 42,478
| 701
| Fig from 2005-06
Annual Accounts
|
| NHS Appointments Commission (NHSAC) | 4,156
| 5,420
| 57
| Fig from 2005-06
Annual Accounts
|
| NHS BSA | 432
| 477
| 3
| Fig from 2005-06
Annual Accounts
|
| Prescription Pricing Authority (PPA) | 74,054
| 73,749
| 2,849 | Fig from 2005-06
Annual Accounts
|
| Dental Practice Board (DPB) | 23,811
| 27,104
| 250
| Fig from 2005-06
Annual Accounts
|
| NHS Pensions Agency (NHSPA) | 27,595
| 27,249
| 391
| Fig from 2005-06
Annual Accounts
|
| NHS Counter Fraud and Security Management Service (NHS CFSMS)
| 16,474 | 17,719
| 268
| Fig from 2005-06
Annual Accounts
|
| NHS Purchasing and Supply Agency (NHS PASA)
| 25,843 | 26,497
| 350
| Fig from 2005-06
Annual Accounts
|
| NHS Logistics | 0
| 72,100
| 1,474 | Fig from 2005-06
Annual Accounts
|
| NHS Direct (NHS D) | 7,296
| 149,136 |
3,154 | Fig from 2005-06
Annual Accounts
|
| NHS Professionals (NHS P) | 43,927
| 32,950
| 649
| Fig from 2005-06
Annual Accounts
|
| NHS Estates (NHS E) | 2,288
| 6,323
| 207
| Fig from 2005-06
Annual Accounts
|
| Total | 861,893
| 2,169,290 | 27,033
| |
|
Source: As stated in table.
Footnotes:
1. The Human Tissue Authority came into being on 1 April
2005 and hence is a new ALB this year.
2. Health Development Agency merged with the National
Institute for Clinical Excellence on 1 April 2005 and hence is
not on this years' list.
3. National Clinical Assessment Authority merged with
the National Patient Safety Agency on 1 April 2005 and hence is
not on this years list.
4. NHS Modernisation Agency (NHSMA) and NHSU merged to
form the NHS Institute for Innovation and Improvement (NIII).
5. National Blood Authority and UK Transplant Merged
mid year to form NHS Blood and Transplant and are shown as the
new body. The Income and Expenditure shown above is comprised
of the sixmonths to 30 September 2005 of NBA and UKT and six months
to 31 March 2006 of NHS BT.
6. NHS BSA has run in shadow form in 2005-06 and whilst
not part of the ALB sector until it goes live in 2006-07 is included
here for completeness.
7. NHS Information Service dissolved. The Health and
Social Care Information Centre and NHS connecting for Health (NHS
CfH) were created to move IT inthe Health sector forward.
8. NHS Estates (NHSE) was dissolved mid year, figures
shown to closure at 30 September 2006.
9. Grant in Aid refers to Revenue only.
10. Gross operating costs exclude:
Depreciation and Amortisation.
Capital Charges.
Profit/Loss on Disposal of Fixed Assets.
Impairments.
11. The figures for Connecting for Health (CfH) comprise
those for the whole agency, as it is not possible to provide a
breakdown for that element of their organisation that was previously
part of the NHS Information Authority. As part of the Department
of Health, CfH receives an allocation of DH funds rather than
Grant in Aid. The figure given in the "Gross Operating Costs"
column is the near-cash spend of CfH for 2005-06, which excludes
the non-cash items listed in note 10. The figure of 1,412 represents
CfH headcount not WTEs.
5.13.2 Could the Department detail and comment on
the extent of savings from its own change programme and the review
of Arm's Length Bodies? What further savings are anticipated in
2006-07 and 2007-08? What risk assessment has been undertaken
to accompany these change programmes and to indicate the limits
to further savings? What have the redundancy and relocation costs
of these change programmes been? (Q100)
ANSWER
1. The Change Programme was undertaken to support the
transformation of the whole NHS and social care system. The predominant
aim was to have a smaller strategic Department with operational
responsibility devolved throughout the health and social care
system. There was no specific financial target set as part of
the DH Change Programme. However, the administration costs agreed
in the 2004 Spending Review reflected the reduction in size and
shape of the Department as a consequence of the Change Programme.
2. From the review of arm's length bodies (ALBS), £55
million recurrent cash releasing savings were achieved in 2005-06
and a further £95 million is expected in 2006-07 and £50
million in each of the following two years.
3. The Department's Change Programme was managed as a
project, and operational risks—for example, the risk of
failing to complete the necessary human resources work to the
planned timetable—were managed using project management
principles. The risk assessments for these were reviewed by the
Programme Board regularly. in addition, the Change Programme presented
a variety of strategic risks to the Department's business, for
example the possibility of a sustained decline in morale, or that
the balance of skills in the Department's staff might not match
the needs of the continuing business. These were not subject to
formal risk assessments in the same way, but were reviewed by
senior managers and the Departmental Board during the course of
the programme.
4. The limits to further savings are also subject to
continuing review, in the light of changes to the Department's
workload. Savings in future years will be settled as part of the
Comprehensive Spending Review.
5. ALBs' capability to deliver these savings has been
assessed in an extensive business planning cycle for each body
covering this year and the next two. In addition, delivery will
be monitored using the Department's standard performance management
procedures for its ALBs including quarterly balanced scorecards
and review meetings with the bodies themselves.
6. Transition costs for relocation and redundancies as
a result of the ALB review were £10 million in 2005-06 and
are expected to be around £13 million in 2006-07.
5.13.3 Could the Department detail (a) administrative
and (b) programme expenditure on consultants in 2005-06? Could
the Department comment on these data and the quality of them?
(Q101)
ANSWER
1. DH expenditure on consultancy services for 2005-06
is given in Table 101.
2. We have previously been unable to report spending
against our programme budgets due to definitional difficulties.
For example, the term "consultancy" is very broad and
not well defined; this has led to a number of financial transactions
being scored inappropriately.
3. To assist in the re-coding of data and for the purpose
of interpretative analysis, we have now defined "consultancy"
where all of the following criteria are met:
— an arrangement where an individual or organisation
is engaged to provide expert analysis and advice which facilitates
decision making;
— to perform a specific one off task or set
of tasks; and,
— to perform a task involving skills or perspectives
which would not normally be found within the Department.
4. We have undertaken considerable work to validate the
2005-06 programme and administrative data, and this has enabled
us to provide a much more accurate figure for consultancy expenditure.
Table 101
DH EXPENDITURE ON CONSULTANCY SERVICES, 2005-06
|
| | £ millions
|
|
| Administrative expenditure | 6.0
|
| Programme expenditure | 127.0
|
| Total | 133.0
|
|
|
